Truck and bus tyres made in China have suddenly become much more costly throughout the European Union as a result of “anti-dumping duties” introduced by the European Commission last month.

The duties are described by the commission as “provisional” and will apply initially for six months. But a change of heart after that time seems unlikely, given that the latest action follows a lengthy and hugely detailed investigation into the European truck and bus tyre and retread market.

This was prompted by vociferous complaints from European tyre-makers and others about the effects on various EU businesses – not least small independent retreaders – of a flood of cheap tyres originating from China.

Four manufacturers singled out

Four specific Chinese tyre companies have been singled out in the anti-dumping regulation published by the commission in the Official Journal of the European Union last month. They are Xinguan Tire Group, Giti Tire Company, Aeolus Tyre Company (owner of the Pirelli tyre business), and Chongqing Hankook Tire Company.

The new duties apply to all tyres, new and retreaded, regardless of when they were manufactured, and range from €52.85 (£46.10) per tyre for Hankook to €82.17 (£71.70) per tyre for Xinguan and “all other companies” from China exporting tyres to the EU.

Tyres made by “co-operating Chinese exporting producers”, including plants operated by Bridgestone, Goodyear, Michelin, Toyo and Triangle Tyre, are also subject to an anti-dumping duty, of €62.79 (£54.80) per tyre.

The duties apply to all China-manufactured tyres with a load index above 121 (certified to carry up to 1,450kg at maximum rated speed).

European Commission decision follows detailed investigation

The official European Commission investigation into allegations of dumping by Chinese tyre-makers started last June following a complaint by a group of European tyre-makers and others thought to represent collectively more than 45% of all EU truck and bus tyre and retread production.

Last October it was claimed by the China Rubber Industry Association (CRIA) and the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC) that there was no evidence of a history of dumping, selling tyres at a loss and even below the cost of a retread, which is normally expected to be around 60% or less than the price of a new tyre.

The commission disagrees, following its initial investigation into alleged dumping and “injury” covering the period from 1 July 2016 to 30 June 2017. Investigators visited several tyre manufacturers and retreaders in the EU, including a Goodyear plant in Poland, a Marangoni retreading operation in Italy and four producers who asked to remain anonymous.

Visits were also made by commission investigators to tyre plants in China including those operated by Aeolus Tyre Company, Giti Tyre and Shanghai Hankook Tire Sales as well as to EU importers including Giti’s UK base in Cheshire and Hankook’s in Northamptonshire.

Hankook, based in Korea but with many tyre manufacturing plants elsewhere, including China and Hungary, is reckoned to be the top-selling tyre maker at present in the UK’s replacement truck tyre market.

The commission calculates that the number of Chinese truck and bus tyres imported to the whole EU grew from around 3.5 million in 2014 to 4.6 million by last year. The share of the market taken by Chinese tyres has grown from 17.1 to 21.3% in that time, it is estimated.

Duties aim to halt job losses and business closures

Among the key findings in the report published last month are that around 4,200 EU jobs in tyre manufacturing and retreading were lost during the period under consideration, that large companies have shut down plants, and that as many as 85 small and medium-sized enterprises in retreading had stopped production.

The commission will decide in November whether or not to continue applying the current anti-dumping duties for a further five years. It can surely expect intense lobbying between now and then, from Chinese tyre makers on the one hand arguing against this and from established European tyre makers and retreaders on the other strongly supporting a continuation of the duties.

One pressing concern for truck operators in the UK and Irish Republic, apart from the sudden price increase on some tyres simply as a direct result of the new duties, is that there could soon be shortage of some sizes and tread types as some Chinese tyre makers decide to cut back on exports to Europe and established European tyre manufacturers struggle to keep up with a sudden increase in demand.

Commission clear on effects of dumping

The commission accepts the commonly-held view that the European replacement truck tyre market sub-divides into three broad categories or “tiers”, ranked according to product quality.

“The majority of the total volume of dumped Chinese imports concentrates on tier 3, forcing several EU producers in that tier, in particular SME retreaders, to exit the market,” it says.

Prices of all tyres were set previously by top-quality “tier 1” products, it reckons. Now this is changed, with tier 2 price established on the basis of tier 3 and tier 1 on the basis of tier 2.

“This resulted in a decrease of selling prices in all tiers. The commission thus provisionally concluded that the surge of dumped imports from the PRC [China] had a determining role in the material injury suffered by the European Union industry.”